Parallel Trade's Emerging Image Crisis - Pharmaceutical Technology

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Parallel Trade's Emerging Image Crisis
Parallel trade has frustrated pharmaceutical manufacturers for years and now evidence has linked such trade to drug shortages in Europe. Parallel trade representatives have yet to respond, but will need to react quickly to salvage their reputation.


Pharmaceutical Technology Europe


Parallel traders on the defensive

Although parallel trade has received backing from the legal establishment, opinions from the industry may be changing. One of the complaints from pharmaceutical companies has been that parallel trade can lead to product shortages in certain countries as medicines are diverted elsewhere (3). Such views have relied on anecdotal evidence and so have easily been countered by parallel traders, who have blamed manufacturers for product shortages (7). However, the ongoing eurozone crisis in Greece and a parliamentary report in the UK have provided the sort of evidence that the pharmaceutical industry has needed to directly link parallel trade with shortages.

Greece. Austerity measures have placed huge pressures on the healthcare system in Greece. Traditionally, the country has always been a lowpriced market, but in 2011, the Greek government cut drug prices further to reduce the country's medical expenditures. These price cuts have led to a documented surge in parallel trade out of the country (8). Faced with domestic customers, including hospitals, who cannot afford to pay for medicines, many wholesalers have turned to the European market to make a profit. The PanHellenic Association of Pharmacists has reported that 500 commonly used drugs are now in short supply (8). These include products for hypertension, gastroenterological disorders, cancer, kidney diseases and painkillers, placing patients in a dangerous position.

Greece's National Organisation for Medicines (EOF) has become so alarmed at the situation that it has launched a hotline for reporting shortages and tried to introduce a temporary ban on the export of 28 identified medicines (8). Since March 2012, wholesalers have been required to submit their sales per product and per client to EOF. This information is to be used to provide guidance on how to distribute the drugs. The EOF has also begun to electronically tag medicines to track usage, identify shortages and control parallel exports (9). So far, these official measures have failed to counteract the shortages and have been beset by other problems. In April, the electronic tracking system had to be taken offline as hackers uploaded around 1.5 million fake prescriptions (9).

The UK. In May 2012, the British Parliament's All-Party Pharmacy Group (APPG) published a report calling for restrictions on the practice of parallel trade (10). APPG states that the UK has been experiencing shortages of prescription medicines available on the UK's National Health Service for four years and that exporting by speculators, although legal in the EU, is responsible for this occurrence. In compiling its report, the APPG heard evidence of vulnerable patients not receiving the medicines they needed, including patients with mental health problems, epilepsy sufferers, diabetics and pregnant women. Although the APPG recognised that the Department of Health had tried to prevent shortages by informing supplychain participants of their obligations to maintain a supply and issuing best practice guidance, they concluded that none of the measures had succeeded. In 2010, the Department of Health held a Ministerial summit to address the issue and announced that the UK's Medicines and Healthcare products Regulatory Agency (MHRA)would tackle the shortages. It was also announced that action would be taken against those in the supply chain who were not fulfilling their supply obligations. However, the APPG pointed out that the MHRA has little market data to determine which products are in short supply and who is exporting them. The APPG was highly critical of the Department of Health, believing that many personnel were resigned to the current state of affairs and even blamed the problems on the previous government rather than trying to act and remedy the situation (10).

The evidence that the APPG gathered regarding parallel trade impacting drug supply appears compelling (10). For example, the group heard that demand for Novartis' Emselex (darifenacin), for overactive bladder syndrome, rose to 350000 packs over a fivemonth period, vastly outstripping any possible UK patient demand. In fact, it was calculated that this amount was equivalent to an astonishing 26-year supply of the drug. The APPG also heard directly from pharmacists who described how the situation was causing stress to their patients, as well as excess work for staff in trying to source medicines in short supply. According to the report, many pharmacists were spending on average between two and five hours a week sourcing out-of-stock medicines.

The APPG has called for immediate action from the government to ensure patient safety. First of all, it has asked the government to unequivocally state that patient health must come before meeting legal obligations concerning the free movement of goods in the EU. In addition, the government has been recommended to examine EU law to determine exemptions that will allow it to prevent current medicines shortages caused by parallel trade.

The APPG has noted that the French government has been facing a similar situation and is examining measures that would place restrictions on the export of medicines. Because France also has to contend with the same EU legal constraints regarding the free movement of goods, it would be logical for the UK government to review the French proposals and see whether they could be employed to ensure that patients in the UK are not deprived of medicines.


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